Repeated adjustment of delegated powers and the history of eminent domain

In representative democracies, citizens delegate powers. Not surprisingly, citizens react angrily when the delegated powers are misused (i.e., used so as to decrease social welfare). Perhaps more puzzlingly, citizens sometimes repeatedly delegate the same power (e.g., surveillance of citizens, conscription), and then repeatedly react with anger to its misuse. To study this phenomenon, we model a stylized public that repeatedly adjusts the set of powers it delegates to politicians. The public obtains new information each period, forecasts rationally (but not perfectly) the benefits and costs of delegation, and infers the likelihood with which a court will correct politicians’ misuses of delegated powers. We use the model to explore the history of eminent domain in the United States—a history characterized by periodic public backlash. The model and historical discussion illuminate the nature of public responses to judicial rulings—explaining why the public may react by adjusting the scope of delegated powers, even if a ruling merely upholds a well-established precedent.

Robert K. Fleck is a professor of economics at Clemson University and a 2016 Lone Mountain Fellow at PERC. His research combines theoretical and statistical analysis, and his major fields of interest include political economy, public finance, economic history, and development economics.

F. Andrew Hanssen is professor of economics at Clemson University and a 2016 Lone Mountain Fellow at PERC. His areas of research include institutions, law and economics, political economy, and industrial organization. Before getting a Ph.D., he was a management consultant, working in Europe, Latin America, and the Far East.